The Book Business: How to measure market performance?
Confession time: sometimes I buy books on Amazon.
I like the convenience of it.
While there is nearly nothing as delightful as perusing the bookshop aisle, daily demands sometimes dictate a few taps on my phone over finding the nearest Chapters or independent bookstore.
What does this mean for the book business?
Discovering the performance of an individual enterprise is straightforward compared to that of an entire market. We might look at the company's gross profit / loss or their annual net income, or a host of other indicators from their audited financial statements.
Pouring over a bookshop's own books, we might see their financial health, but how to understand the health of the broader book business?
Examining the bigger picture presents a more complex challenge, as markets are dynamic and complex, with many moving pieces that are beyond the control of a single intervention.
How do buyers make decisions?
How does my purchasing influence others in the marketplace to adjust their marketing strategies?
How does my penchant for buying books on Amazon over my local bookshop impact both of these enterprises?
- Adopt: when a market actor pioneers a product or service that benefits their market, and especially when they adopt something that benefits the pro-poor market.
- Adapt: when the market actor has tweaked and improved upon the adoption and continues with the product or service, even without subsidy or support.
- Expand: when more businesses copy or innovate on the initial product or service offered. This is called crowding in and is a healthy sign of a market's performance.
- Respond: when supporting businesses and organizations come in to take advantage of the opportunities of a new product or service. Would the market uphold the new product? For example, will illustrators design new fonts for e-books?
A big part of market performance means looking at market segmentation. In the early days, the book business was undifferentiated: hardcover books. Now, so many types to suit your fancy: paperbacks, e-books, audio books, coffee table books, notebooks, and even blooks.
In the same way, when MEDA partners with market actors, we look at the entire target market to try and segment out different customer profiles, whether they be young, rural, women, etc. After a MEDA intervention, we may see a differentiated market with and expanded number of businesses offering a product or service. One example we’ve already seen from the SSBVC Project in Tanzania is: one of our market actors partners developed a new poultry feed product of smaller volume, after noticing women customers buying smaller quantities. This helps us present evidence that we have moved the needle toward a healthier and more sustainable market.
Confessions aside, voracious readers these days benefit from a healthy book business, where one can shop online or leaf through novels at a favourite neighbourhood book shop. Perhaps best of all, the library is always there too, for a free option!
Leave me a comment below - what's your go-to key performance indicator for your business or work?
How do you know, at a glance, when things are going well?
Or, better yet--register for MEDA’s 2018 Convention, where I'll be presenting on similar themes.